Whitehall’s sales drop while losses grow

December 13, 2005byJCK Magazine

Whitehall Jewellers, Inc. reported total third quarter sales of $58.9 million compared to $63.3 million for the previous third quarter, a 7 percent decline. The net loss for the third fiscal quarter increased more than four-fold to $42.9 million, compared to a net loss of $8.3 million for the same period a year ago.

For the year to date, ended Oct. 31, the Chicago-based retailer reported a 5 percent drop in sales to $198.3 million, compared to $208.7 million the previous year. Net losses grew four-fold to $71.9 million, versus a net loss of $15.2 million for the same period a year ago.

“The company is focused on the Christmas selling season,” said Robert L. Baumgardner, Whitehall chief executive officer. Thanks to the support of our investors, banks and in particular the vendor community, the Company has received the assortments necessary to compete during the holiday season.”

Whitehall also said that it has set a date of Jan. 19, 2006, for its special meeting of shareholders to consider various proposals relating to previously announced financing transactions with Prentice Capital Management, L.P. and Holtzman Opportunity Fund, L.P.

As previously reported, the company plans to close 77 unprofitable stores and to liquidate approximately $44 million of primarily unproductive inventory in those stores. The Company expects these stores to close by Feb. 2006.

“With the trimming of our store base and underproductive inventory, we will be positioned to focus on improving the productivity in our remaining stores,” Baumgardner said.

Whitehall Jewellers, Inc. is a national specialty retailer of fine jewelry, operating 389 stores in 38 states in regional and super regional shopping malls under the names Whitehall Co. Jewellers, Lundstrom Jewelers, and Marks Bros. Jewelers.